Examveda

The funds available with a company after paying all claims including tax and dividend is called

A. net profit

B. net operating profit

C. capital profit

D. retained earnings

Answer: Option D

Solution (By Examveda Team)

Let's break down why:

Net Profit (Option A): This is the profit a company makes *before* paying out dividends to shareholders or setting aside money for future use.

Net Operating Profit (Option B): This focuses on the profit from a company's core business operations. It doesn't account for things like taxes or dividends.

Capital Profit (Option C): This comes from selling assets (like property or equipment) for more than you originally paid. It's not the profit left after *all* expenses are paid.

Retained Earnings (Option D): This is the profit a company has left over *after* paying all its expenses (including taxes) and distributing dividends to shareholders. It's the money the company "retains" for reinvestment or other future needs. This is the definition that perfectly matches the question.

This Question Belongs to Commerce >> Accounting

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Comments (1)

  1. Dr. Amit
    Dr. Amit:
    12 months ago

    In my opinion, correct option is option D

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